Running and growing a business is a balancing act. Not only must you manage clients, vendors, employees, and the million "unexpected" problems that inevitably crop up -- you must do all that while maintaining positive cash flow.
According to numerous studies, including a report by Entrepreneur.com, cash flow is among the most common reasons that new businesses fail. In fact, estimates project that a whopping 82 percent of business failures can be directly attributed to poor cash flow management.
Of course, cash flow problems aren't necessarily the fault of the business owner. In fact, growing companies often find that rapid increases in sales can lead to cash flow issues. This is because scaling your business up isn't necessarily cost-effective at the beginning. Add that to the fact that you will inevitably have Accounts Receivable issues -- with new clients paying six months after you've incurred the cost of services -- and it's understandable why so many small businesses have cash flow problems.
Getting the Right Type of Capital for your Business
In order to deal with the inevitable cash flow issues that crop up, it's important to have a way to get working capital for your business. Working capital is generally defined as capital necessary for the ongoing operations of a business, so it's easy to see why having enough on hand is so important!
Credit cards and bank loans are one option. However, they both come with considerable downsides. Credit cards tend to have fairly high interest rates, which can make them an expensive source of working capital. In addition, it is difficult, if not impossible, to cover your payroll with a credit card.
Bank loans and lines of credit can offer more favorable terms. However, the process of obtaining a bank loan can be long and arduous. In addition, there is no guarantee that you will actually qualify for the loan.
If you are serious about getting the working capital you need in a cost-effective way, advance credit card processing is worth checking out. You can borrow against future credit card transactions your business receives in order to get the working capital you need today.VMS' working capital program will get you an approval decision quickly and the capital you need can be in your account within 24–72 hours.
Velocity Merchant Funding is a customized funding program designed to give merchants access to the capital that they need today. They can receive as little as $3,000 up to $250,000 based on current business revenue and not just credit card sales receipts. VMS funds everything in 24–72 hours after going through the underwriting process. No fixed payments. Repay only when you are making sales.
To learn more, check out the VMS Cash Advance – Velocity Merchant Funding / Working Capital Program Page